LAND-LOCATION AND USE
MANAGEMENT 5.52 1) 3-7 MEMBERS
COURT MAY REFUSE TO APPOINT ELECTED MEMBER 5.52 (4) COURT MAY APPOINT ANY QUALIFIED PERSON S.52 (5)
MAORI LAND COURT MAY REMOVE FROM OFFICE ANY MEMBER OF
COMMITTEE OF MANAGEMENT S.53 (4)
MAORI LAND COURT MAY APPOINT EXAMINING OFFICERS TO
INVESTIGATE AFFAIRS OF INCORPORATION. 5.61
DIAGRAM 3; THE MAORI LAND COURT ROLE IN APPOINTMENT OF COM- MITIEES OF MANAGEMENT, REMOVAL AND SUPERVISION.
No's 1, 3, 4 Blocks Incorporated, 22 a case was stated to the Supreme Court on the grounds on which a Maori Land Court can refuse to confirm the election of a committee of management. The provision in the statute then was identical to the present provision. The Court could refuse to make an order confiriming appoint- ment, "if sufficient cause was shown". Hutchinson J examined the section and phrse carefully and concluded, 23
These words are wide an unqualified. Whether sufficient cause is shown in a question for the Maori Land Court. I see in those words, on the face of them, nothing restrictive, nothing that confines the court to any particular cause, nothing that disqualifies it from refusing to confirm in election on any grounds that it holds sufficient.
Like companies, incorporations experience crises of management. The impasse in a company that results is resolved by internal action to remove the source of trouble and only in extreme cases by litigation. Matters are more problematic in an in- corporation where a sense of corporate identity is forged from descent, and to a les- ser extent marriage. Shares represent kinship bonds. Tension between rival family groups is not uncommon in incorporations, these rivalries being articulated through the families spokesperson on the committee of management.
The level of skill required to manage such large enterprises is high and a failure to co-operate can be costly from the incorporations point of view. The Mangatu Block Incorporation from 1950 for a ten year period experienced a protracted series of liti- gations as a result of disputes over appointments to the committee of management.
The struggle was between two main groups of owners who wanted to achieve domi- nance. Much quarrelling, dissention and litigation was the result.24
In re Waihirere and Waihirere No. 2 Inc. Te Ua v Halbert,25 an application was made for removal of members of the committee of management and the appoint- ment of others to replace them. This was an appeal against the decision of the Maori Land Court. It was held that the Court has complete control over the appoint- ment of committees of management. In this case it was apparent that the chairman and secretary of the incorporation had been inefficient and even dishonest. The ad- ministration costs were excessively high, with substantial payments to the chairman and gifts to selected persons. The order made by the Maori Land Court removing the members of the committee of management was affirmed. The Maori Land Court was able to appoint the new members as the court had sufficient knowledge of vari- ous lands and incorporations and the character and ability of many of the persons in- volved with them, by reason of the work of the court in dealing with applications.
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In Re Proprietors of Te Hapua 42 Incorporated, Murupaenga,26 was an appeal to the Maori Appellate Court against a decision of the Maori Land Court which refused to appoint a solicitor who had been elected and another person was appointed by the Court instead. The committee of management had resigned in 1971 and in that same year the Maori Land Court had appointed an examining officer to look into the incorporations affairs under Section 61 of the Amendment Act. The Maori Land Court considered that factions on the committee of management had caused the problems, the solicitor concerned represented one faction only and the committee of management must act in the interests of the owners as a whole. The solicitor was not given a proper hearing and the Appellate Court went on to consider whether a rehearing was appropriate or whether the applicant should be appointed to the com- mittee. The Court held that on all the evidence available to it, the applicant should be appointed.
The Court may refuse to appoint members to a committee of management if an elec- tion had not been conducted in accordance with the law. A proxy vote in Re the Pro- prietors of Tahora 2 C 1 Section 3 lnc,27 was crucial to achieve a majority as there was clear support for alternate nominees from the majority of these present in per- son at an annual general meeting. The issue of proxy voting was examined by the Maori Land Court and it was held that proxy votes were not invalid if they were in- correctly dated.
It is apparent that there is considerable cultural and kinship obligations on members of committees of management who must meet kinship expectations often at the cost of business efficiency.
Not all incorporations are divided by factionalism . The more successful present a united front with a clear acceptance of business principles. Puketapu 3A Block is renown for its extraordinary success with major developments in the timber milling and then the farming industry. The committee of management of Puketapu 3A Block were described as a group of men who had
Wide experience in administrative and secretarial w2
8
k, or have responsible posts in bushwork or are experienced farmers.The factionalism which almost destroyed the Mangatu Blocks incorporation has now disappeared and the incorporation is extremely successful. In 1985 the committee
of management recommended a dividend of 36 cents per share or a total of
$317,376.29
The outlook for the farming industry is not optimistic. The prices for exports have dropped, farm support prices, incentives and subsidies have been removed. The need to ensure high liquidity and a light debt ratio is very important when major chal- lenges lie ahead for committees of management.
As we have discussed earlier Maori management has been criticised for its lack of ability. A. Paui,30 claimed in his report that the requirement that there be consent by the Maori Land Court before committees of management are appointed, is recogni- tion of the lack of management ability. He described the situation graphically in the following way,31
BUSINESS AND INDUSTRY DECISIONS MADE BY PAKEHA
MAORI'$ FOLLOW
It is submitted that it is desirable that the overseeing role of the Maori Land Court is essential for a kinship-based organisation of such a diverse nature as an incorpora- tion. The Maori Land Court has moved from a paternalistic role in management mat- ters to a more inquisitorial role which allows all matters to be explored and dis- cussed, and removes the potential for future conflict on the part of the committee of
management.
It is further submitted that A. Paul's analysis of the failure of Maori to control the Pakeha dominated business world, is not correct and fails to recognise the major cultural differences underlying the two systems. As we have seen, it is difficult to generalise about management abilities in incorporations (or Section 438 trusts).
Each incorporation or trust must be looked at).eparately for the individuals who make up a committee of management are the crucial factors in business success.
At the same time it is acknowledged that a kinship-based system will inevitably mean that selection processes are different and the result may not mean that man- agement efficiency is at a premium.
1 1
(1) (2)
(3) (4) (5) (6) (7) (8) (9) (10) ( 11 ) (12) (13) (14) (15) (16)
(17) (18) (19)
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REFERENCES
[1923] AC 7 444 @ 767
Law Commission Preliminary Paper No. 5
Company Law A Discussion Paper (1987) Page 21 Section 31 (2) Maori Affairs Amendment Act 1967.
Section 32(1) Maori Affairs Amendment Act 1967.
Section 32(2) Maori Affairs Amendment Act 1967.
Section 32(3) Maori Affairs Amendment Act 1967.
Section 32(4) Maori Affairs Amendment Act 1967.
Section 32(5) Maori Affairs Amendment Act 1967.
Section 32(6) Maori Affairs Amendment Act 1967.
Section 32(7) Maori Affairs Amendment Act 1967.
Section 33 Maori Affairs Amendment Act 1967.
Section 33(2) Maori Affairs Amendment Act 1967.
Section 37 A Maori Affairs Amendment Act 1967.
Section 41 (2) Maori Affairs Amendment Act 1967.
Clause 270 Maori Affairs Bill
Farrar & Russell Company Law & Securities Regulation in NZ (Butter- worths, Wellington 1985)
Section 41 (5)
The Modern Corporation and Private Property ibid.
Farrar & Russell Page 281
(19a) Table A. Article 75, Articles 89 - 97
(19b) Preliminary Paper No. 5 Company Law. A Discussion Paper. Law Commis- sion (1987 Wellington , NZ)
Paras 171 - 172.
(19c) Section 53(1) Maori Affairs Amendment Act 1967 (20) Section 54(1) Maori Affairs Amendment Act 1967 (21) Section 52(4) Maori Affairs Amendment Act 1967 (22) [1954] NZLR 624
(23) (a) 627
(24) In re Mangatu 1, 2 & 4 Inc. Te Va v Hooper & Ors.
(1960) 29 Gisborne ACMB 287 (25) (1960) 29 Gisborne ACMB 271 (26) (1972) 2 Tokerau ACMB 71 (27) (1962) 66 Wairoa MB 83 (28) The Tribe That Made A Million
e.g. Schwimmer, Te Ao Hou Vol. 9 (29) The Proprietors of the Mangatu Blocks
Annual Report and Statement of Accounts for the year ended 30 June 1985 Page v.
(30) A. Paul. The Future Role of Maori Economic Authorities July 1985
Unpublished report presented to Maori Authorities Conference, Rotorua 2 - 4th August 1985.
(31) Ibid. Page 20.
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